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 Senegal depends on oil-fired stations run on imported fuel. The government has promised to invest over US$1billion to boost capacity by 2012 and is looking to pass laws to promote renewable energy such as solar power, including through tax-breaks.
While the former French colony has long enjoyed a reputation as a stable and well-functioning democracy, a number of scandals have unnerved some potential investors.
In March, the former head of its telecom regulator was held on suspicion that he embezzled funds from the award of a telephone operating licence to Sudan's Sudatel
"It's worth keeping in mind that governance issues have been and could still potentially be detrimental to Senegal's economic performance," said Victor Lopes of Standard Chartered.
Senegal's budget deficit stood at 4.9 percent of national output last year and is expected to tick up this year and next with a forecast increase in state spending before a 2012 poll in which the 83-year-old President Abdoulaye Wade is due to stand.
"The fiscal deficit is likely to widen in 2010 with higher salaries and operating costs, and the trend is likely to get worse in 2011 - pre-elections year," said analyst Lydie Boka at France-based private forecaster StrategiCo.
Inflation is seen as under control at around 2.0 percent after having been uncomfortably high during recent previous years.
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